In the age of rapid digitization, it is often hard to keep track of the latest that markets have to offer. However, none have missed witnessing the steep rise of non-fungible tokens – commonly referred to as NFTs in the Crypto market. With a more significant push for economic freedom coupled with the power of the internet, blockchain technologies and NFTs are opening new horizons.
The rise of NFTs in the Crypto market cannot be ignored, gaining traction in countries the world over, including India. Based on trends in the macroeconomic space, here is why we believe NFTs are here to stay:
- Augmented Blockchain-driven assets: Blockchains are transparent databases, possessing very high-security measures – enabling anonymous payments for contracts doled out. When it comes to NFTs in Crypto, we must note that while some NFTs are created solely as a social statement, others possess utility in real-world transactions. While still in its nascent stages, this technology can help make a new financial economy run entirely on the internet, enabling just about anything digital to be minted as an NFT and traded as assets.
- Global Liquidity: NFTs can help achieve an unprecedented scale of globalization, with many experts pegging it to be a future store of value and exchange. It is predicted that in the time to come, all real-world assets will be tokenized on the Blockchain as NFTS. This will then create a global market that works round-the-clock, without any halts, uniting the world's consumers on a common platform.
- Blockchain for infrastructure revamps: There exists an inverse relationship between society's trust in technology and their trust in businesses and the government – as the latter diminishes, the former rises. We are already witnessing such a revolution, with technological innovation booming. This has also resulted in software coming under attack for its centralized nature, given the power it holds. Thus, regulators are using blockchain-backed technology, keeping in mind the vitality of decentralization.
- Increased Adoption by Industry: Businesses run on the flow of information, and at present, this remains in the hands of a few. When organizations decide to move to NFTs, supply and demand will be accessible in real-time, creating a seamless and transparent environment.
- The Culture of Finance: The world we live in is driven by technology – everything you learn and hear, is on the internet. The pandemic pushed more people to browse the internet and study finance, including NFTs in the Crypto market. This interest has already made the NFT market a billion-dollar market, and there's no saying what lies ahead.
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Conclusion
NFTs in the Crypto market is rising and rising fast. However, we at Motilal Oswal advise immense caution before any such investments. For more details, visit us
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